Activity Based Costing (ABC) is an accounting method that assigns costs to activities according to their use of resources, rather than products or services. This enables resources and other related costs to be more accurately attributed to the products and the services which they use. It does not change or eliminate any costs, in the other way; it provides detailed information on how costs are consumed. The main benefits of Activity Based Costing are providing understanding into the fastest growing and least visible element of cost-overhead. We can also improve profitability by monitoring total life-cycle cost and performance so that we can improve the effectiveness of budgeting by identifying the cost of different service levels. In addition, ABC costing does encourage continuous improvement and total quality control because control and planning are directed at the process level and it links the corporate strategy to operational decision making. By using ABC Continue reading
Modern Management Concepts
Innovative Organizations – Meaning, Elements and Leadership Behavior
Many organizations are resistant to changes and continue operating the way they had been operating in the past. To remain competitive, they work harder, improve efficiency, reduce cost and implement best practices. But, this is not enough. Instead of getting stuck in their standard mode of operations, organizations need to adopt innovative ways to change the strategies. The best way to create a competitive edge and be in the head of the competition is to innovate by drawing advantage from the creative power of your people. Turn your greatest assets into opportunistic entrepreneurs who discover new ways and improve the way they do business. Management innovation involves total transformation of existing culture to enhance organizational performance in an integrated manner involving technological innovation, product and service innovation, and strategy and structural innovation. Every organization needs to have a vision, a culture and a process of innovation to build a truly Continue reading
eGovernment – Definitions and Benefits
EGovernment is one more of the recent years “buzzwords”. It is usually either paired with the word “services” at the end or other words like eGovernance and Digital Government. Like every other (relatively) new and cool “buzzword” they are used widely by a broad spectrum of individuals who represent mostly two different backgrounds. Information technology and politics. The first because it is a technological issue, the later because they have come to realize, even though a little late, that they represent an excellent vehicle for them to provide a better experience to anyone who interacts with the Government. But, what do these terms mean? Do they collide or conflict each other? How about covering or including one another? EGovernment is in the first stages of development. Most governments have already taken or are taking initiatives offering government services online. However, for the true potential of eGovernment to be realized, government Continue reading
Sources of Resistance to Change
The goal of planned organizational change is to find new or improved ways of using resources and capabilities in order to increase an organization’s ability to create value and improve returns to its stakeholders. An organization in decline may need to restructure its resources to improve its fit with the environment. At the same time even a thriving organization may need to change the way it uses its resources so that it can develop new products or find new markets for its existing products. In the last decade, over half of all Fortune 500 companies have undergone major organizational changes to allow them to increase their ability to create value. One of the most well-documented findings from studies have revealed that organizations and their members often resist change. In a sense, this is positive. It provides a degree of stability and predictability to behavior. If there weren’t some resistance, organizational Continue reading
The Need for Corporate Entrepreneurship
Corporate entrepreneurship or Intrapreneurship is an important element in large and medium organizations. Intrapreneurship exists within the organizations. It plays important role in organizational and economic development. Intrapreneurship leads not only to new ventures, it leads to other innovative activities and orientations such as development of new products, technologies, services, strategies and competitive postures. In good or bad economic times, companies seek innovations to remain competitive. Intrapreneurs are more intelligent and have ability to perceive the big picture. They are self motivated, and optimistic. These people are action oriented and move quickly to get things done. Corporate entrepreneur is a person who focuses on innovation and creativity to transform dreams into profitable reality. A charismatic leader in a company instills an entrepreneurial philosophy in the employees in an organisation. These entrepreneurs must have leadership characteristics. They must be visionary and flexible. Entrepreneur encourages team work and builds coalition of support. Continue reading
Digital Transformation and Digital Leaders
Today’s businesses are always more interconnected via various networks and platforms as society in general is experiencing a Digital Transformation, this digitalization exposes businesses to new opportunities but also new threats. As the way business is conducted changes, the figure of leaders that lead organizations through the business ecosystems need to change obtaining a range of skills, abilities and behavior in order to be successful as Digital Leaders. So a question arises: Who is a digital leader? Digital leaders can be found across the organization in the various levels, from operational levels as operational managers, division level as divisional or line managers, executive level as executives such as CEOs, CIOs, or Board levels. Digital leaders are the new leaders that guide, empower and inspire employees throughout all the organization in order to successfully achieve the planned objectives. This are the same old leadership trait but this are executed in a Continue reading